The third-party defendants move pursuant to Rule 12(b)(2) Fed. R. Civ. P. to dismiss the third-party complaint for lack of personal jurisdiction. The motion is denied.

I.

This action was commenced in July 1982 by the plaintiffs, five savings and loan associations and one municipality, against the defendants, Comark, a California limited partnership, and Marine Midland Bank, N.A., ("Marine") a national bank. Comark is a limited partnership, engaged in the business of buying and selling government securities.Comark is organized under the laws of California, with headquarters in California, and branch offices in New York and in Florida. Marine is organized under the laws of the United States with its central office and headquarters in New York.

Plaintiffs allege that Comark represented to the plaintiffs that securities which they had purchased from Comark would be segregated in safekeeping accounts; that the securities were instead deposited and integrated in a Marine account with other securities owned either by Comark or by other customers; that Comark used the plaintiffs' securities as collateral for a loan from Marine; and that Marine sold the plaintiffs' securities to satisfy debts owed by Comark. Plaintiffs sue Comark and Marine for damages under the federal and New York securities laws, the Uniform Commercial Code, and common law.

In August, 1982, after bringing cross-claims against Comark for indemnity and distribution, Marine filed a third-party action against E. Keith Owen and Robert W. Bell, the general partners of Comark, seeking indemnity and contribution. Owens and Bell then filed this motion to dismiss the third-party complaint for lack of personal jurisdiction.

In January 1981, Marine agreed to enter into a clearing agency relation with Comark. Thereafter, between March 1981 and June 1982 Marine executed trades, on Comark's instructions, for Comark's account in New York, in average aggregate face amounts exceeding one hundred million dollars per day.These transfers were effected by computer instructions which were sent and received between Marine's New York City offices and the Federal Reserve Bank of New York, and by physical delivery and receipt of securities to and from Comark's trading partners and their agents in New York.

Between March 1981 and June 1982, Marine also loaned Comark an average of twelve million dollars per day, when Marine's execution of Comark's trading instructions resulted in net cash disbursements which exceeded Comark's cash balance with Marine. Repayment of these cash advances was secured under a General Loan and Security Agreement by which Comark conveyed to Marine a floating lien on the content of Comark's securities clearance and demand deposit at Marine. Pursuant to a General Loan and Security Agreement executed by Owens and Bell, all of Comark's obligations to Marine were to be the individual obligations of Owens and Bell as well as the obligation of the partnership.

Marine's third-party complaint alleges that Marine is entitled to indemnification from Owens and Bell: 1) in accordance with the terms of the General Loan and Security Agreement and of the clearing services agreement; 2) as a consequence of Owens and Bell being general partners of Comark; 3) for failure to instruct Marine to segregate securities in a safekeeping account and to advise Marine that Comark's customers might claim an interest in these securities.

II.

In support of their motion to dismiss, Owens and Bell contend that, under New York law, there is no basis for this Court to invoke in personam jurisdiction over either of them since they are neither present in New York nor subject to the New York long-arm statute. Specifically, they argue that CPLR 302(a)(1) is not applicable to them since the contract between Comark and Marine was not executed in New York by the defendants, nor was it substantially negotiated in New York. They assert that their status as general partners of Comark adds nothing to the jurisdictional mix, since jurisdiction over each of them must be based upon their own personal contacts with New York and not those of the partnership.

Owens and Bell argue further that CPLR 302(a)(2) is not applicable to them because neither of them was physically present in New York at the time of the commission of the alleged tort, as is required to establish jurisdiction under that provision.

Finally, Owens and Bell take the position that Marine acted as Comark's agent in the transactions at issue here, and that, as an agent, it cannot use its own activities on behalf of Comark to support long-arm jurisdiction over Comark.

Marine responds that the general partners of a limited partnership are subject to jurisdiction in lawsuits arising out of partnership business whenever the partnership itself would also be subject to jurisdiction. Marine argues that since Comark regularly and continuously conducted substantial business in New York over the time period relevant to this litigation, and that since the alleged liability of Comark and Marine ...

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